The Military Home Programs' Blog

I received the below email from a close relative...  I decided to post it as I have encountered so many problems with customer service recently and quite honestly, it is just so irritating the way we are treated sometimes.  I continue to ask myself, "With the amount of information at our fingertips, is it possible to really get the word out when we are mistreated by large, reputable companies?"  I have no idea but here is what I do know...

All,
Just wanted to start my personal crusade against EXPEDIA.COM.  As some of you may know Amanda and I were supposed to be leaving for Hawaii for a 2 week vacation this morning.  When we got to the airport, we learned that the carrier we were flying went out of business.  After calling Expedia, speaking to 7 different representatives, and being placed on hold for the better part of 8 hours today to ask them why we were not informed and what could be done to correct this. The answer I received was: 'this is not our problem it is your problem'.  When I explained how this was my family's vacation before my 7 deployment to a combat zone, and how the other booking made through Expedia that we discovered was also cancelled, was for my parents to see their grand child and me one last time before deployment, I was told: 'Military people bring this on themselves. It's too bad for all of us that you're in the military'.  Through the extreme disgust, I managed to keep my calm despite wanting to reach through the phone to the different call centers in India that I talked to and finally managed to stay on hold long enough to get a supervisor.  She promised us 2x $200 coupons to be applied at the Expedia website for future bookings, however, after an attempt to salvage our pre-deployment leave by making a booking I learned (after yet again another call to a representative) the supervisor had lied to us.  Bottomline: 2 sets of tickets (one set for us and one set for my parents) bought 5 months out on Expedia, cancelled without notifying us until we were at the airport, lied to by 'customer service', arrogantly insinuated to that it is my fault for being in the military =  very disappointed family, ruined family vacation, missed opportunity to enjoy a vaction together before another deployment overseas.
 
Please help me to pass this on to ensure that other military families don't get screwed over by Expedia.com; use Travelocity.com!
Liam

After three moves in four years, my resume screamed at potential employers, “we move a lot.” I know many of my fellow military spouses have had this same experience, which leads us to looking at alternatives such as starting our own businesses. And all of our businesses have one thing in common – they require accurate bookkeeping, potential business licenses, and liability protection. Yikes!

The downfall is, if you don’t set up your business correctly from the start, you may end up spending a fortune in attorney and accounting fees to fix any mistakes. To keep this from happening, here are some easy tips to follow to ensure you get off to the right start!!

First and foremost, separate your business income and expenses from your personal ones. This will help tremendously when it comes to tax time. If you don’t have fancy letterhead or a huge sum of money to start, that’s okay. Just open a separate checking account to keep track of your business income and expenses. Some banks offer free business checking accounts. Also, designate one of your credit cards specifically for your business expenses and do not use it for anything else. You may also want to meet with a tax preparer to ensure you understand not only what deductions are available to you but also how to keep proper records for these deductions, such as your auto expenses or a home office deduction.

Second, look into any state requirements for a business license or any regulations that you need to be aware of to run your type of business for the state you run your business in.

And finally, make sure you have liability protection. This can be done by something as simple as purchasing insurance or it can become more complicated and expensive by setting up a limited liability company or a corporation. There are small business attorneys who will do a one hour consultation for free to discuss with you if and when you need to take your business to the next level of protection.

Many of us are experts in our fields but running our own businesses is new for us. So follow these simple steps and rest easy knowing you are off to a great start!

Have you seen or heard those ads to donate your car to charity and get the tax deduction? Well watch out, the IRS has changed the rules and your deduction is now limited to the amount the charity receives when they sell your automobile, NOT the actual value of your vehicle. In the past, tax accountants used the “blue book” value to estimate your deduction, but this is no longer the case. So here is what you need to do to protect yourself:

ü Check that the organization is an eligible organization (see Publication 78 online at www.IRS.gov or check your local library)

ü Remember that only taxpayers who itemize deductions on Schedule “A” get credit for charitable contributions

ü Make sure you get a Form 1098-C from the charity within 30 days of the vehicle selling. It has to be filed with your taxes to get the deduction.

What about other contributions to charities? Well if you donate money, Uncle Sam is going to want proof (a bank record, canceled check, credit card receipt, or a direct receipt from the charity). If it’s $250 or more, a receipt from the charity is mandatory. This new rule starting in 2007 does not allow you to use your personal diaries, notes, or registers for proof any longer, so now is the time to start ensuring you collect your receipts.

For clothing and household items, they must be in good used condition or better. The problem is, the IRS has yet to tell us how they define “good used condition or better”. So once again, to protect yourself, get a receipt from the charity that includes a description of the donated property. If you leave the donation at an unattended drop site, keep a written record of the donation that includes a description of the property and its condition – photos of the donated items also work well.

Have you found yourself sitting on the fence about the best timing for a home purchase? If you have, here is something to consider. Buying a home early in the year could help cut your income taxes. When you consider that mortgage interest, property taxes and points paid for financing a home mortgage all qualify for itemized tax deductions, it makes sense to start them earlier in the year. This is because your itemized deductions are only worthwhile when they exceed the standard deduction ($10,300 for Married Filing Jointly in 2006). Buying later in the year may mean you won’t pay enough in interest and taxes to exceed the standard deduction, thereby missing your opportunity to reduce taxes for that year.

We all know the saying, “there is more than one way to skin a cat” but did you know that California state law also allows more than one way for military families to file their California tax returns? If not, keep reading because you may need to double check your prior year refunds to save big $$$.

Normally, if you file a “married filing joint” federal tax return, you must also file a joint tax return for your state. However, in California, this is not the case. Active duty military members and their spouses may file a “married filing separate” return. So how do you know which way to file? That’s easy! The key to remember is that California actually encourages military families to figure the amount they owe using both the joint and separate filing status to determine which is cheaper. If you have not done this in prior years, the state also allows you to go back several years and amend your state return if necessary. As always, with the complex tax codes, we have to keep in mind that there are several different ways to file depending on how long you have been in California and on what state your military spouse is domiciled in.

For more information on which form to file, see FTB Publication 1032 – Tax Information for Military Personnel at www.ftb.ca.gov or contact Karen.Bates@MilitaryHomePrograms.com.

Have you ever played Monopoly? Buying every property you landed on so you’d eventually get the hotels and win the game? As a military family moving from station to station, you may want to be playing a little monopoly for real.

As military members, we get more tax advantages than most when it comes to home ownership. For example, our BAH is not taxable when we receive it. At the same time, we get a tax deduction for the mortgage interest we pay. That’s just the tip of the iceberg. The tax laws regarding home sales allow married couples to receive up to $500,000 of tax free profit on the sale of their home. To receive this great tax relief, the IRS normally requires you to live in the home for at least 2 years out of the last 5 years at the time of the sale. That’s achievable, but it gets even better for the military. Active duty members get to stop that 5 year clock for up to 10 years. So the military rule is 2 years out of the last 15 years. That means you can buy a home at your current duty station and rent it out for the 13 years after you leave, and still get the profit tax free!

Just like Monopoly, if you buy a home at each duty station you land on, rent it out for 13 years, and then take the profit tax free, you’re in a great position to win the game.

If you would like more information on these tax guidelines and how to take advantage of them, please email Karen.Bates@MilitaryHomePrograms.com

    Watch for Karen's "At Home" articles in Military Spouse Magazine (www.MilSpouseMag.com).  She was recruited as MSM's "Home Buying Guide" specialist in June 2007.  You will soon find the magazine in the Commissaries and it will be published monthly as of January 2008!

Karen is also writing for GI Jobs (www.gijobs.net).  Her first article is due out in their January 2008 issue.